Weekly Retail & Leisure News - 31 January, 2017
Tesco has announced it will acquire wholesaler Booker Group, owner of the Londis, Budgens, Premier Foods and Family Shopper brands, in a £3.7bn deal. The supermarket chain said the deal would create the ‘UK's leading food business.’ The merger will result in Tesco’s share of the convenience market jumping from 17% to around 28% including franchisees, according to data from Euro¬monitor. Commenting on the announcement, Tim Vallance, Head of JLL UK Retail, said: “This is good news for Tesco and the grocery sector in general. In choosing to tie up with Booker, Tesco is ensuring that it is able to cater for a wider variety of consumers across many different channels. This is part of a wider trend for grocers and retailers more generally to seek growth through large mergers and acquisitions rather than through organic store by store or smaller acquisitions. For instance, we have already seen Sainsbury’s take over Home Retail.”
In other news, Under Armour is reportedly in talks with French Connection about acquiring the lease for the fashion chain's Oxford Street store, which would be the sportswear giant’s first store in the UK - the $12bn company currently operates from concessions in the UK. This is further evidence that, for most international retailers, having a flagship store in London is critically important for brand positioning and exposure. It also highlights the ongoing resilience of London’s retail market, despite some serious headwinds for retailers in a post-Brexit world.
And finally, WH Smith has reported positive Christmas trading results for its travel stores, which saw LFLs rise 5% in the five weeks to January 21. Sales were helped by its accessible units in footfall-heavy travel locations, such as airports. LFLs at WH Smith’s high street stores fell 3% in the same period. Across the group, LFLs rose 1%, total sales rose 2%, while UK e-commerce rose 23.2%. Other retailers who reported their Christmas trading results last week were Conviviality, with LFL growth of 2.1% for the six weeks to January 1, and Card Factory, who reported LFLs for Q4 returning to the historic range of 1% to 3%.
Click here to see JLL’s full round-up of Retailer and Leisure Operator’s Christmas trading results.
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Director, Head of Retail Research (UK & EMEA)
+44 (0)20 3147 1155
Director, Head of UK Retail & Leisure
+44 (0)20 7318 7838